LORD ABBETT
MUNICIPAL INCOME FUND
Lord Abbett
Sustainable Municipal Bond
Fund (the “Fund”)
Supplement dated
February
7
,
2025
to the
Summary Prospectus, Prospectus, and Statement of
Additional Information of the Fund,
each dated
February
1, 20
2
5
, as supplemented
Liquidation of the Fund
On
February 4, 2025
, the Board of
Directors
of Lord Abbett
Municipal Income Fund
approved a plan of
liquidation (the “Plan”) pursuant to which the Fund will be liquidated and dissolved
. It is currently
anticipated that the liquidation and dissolution of the Fund will be completed on or around
Spring
202
5
(
the
“Liquidation Date”
).
Any Fund shares outstanding on the Liquidation Date will be automatically redeemed
on the Liquidation Date. The proceeds of any such redemption will be equal to the net asset value (“NAV”)
of such shares after dividend distributions required to eliminate
any Fund
-
level taxes are made
,
the
Fund’s
expenses and liabilities have been paid or otherwise provided for as directed by the Plan
,
and the
Fund has
distributed to its shareholders of record the remaining proceeds in one or more liquidating
distributions
on
the Liquidation Date as set forth in the Plan
.
At any time before the Liquidation Date, shareholders may
:
▪
Exchange their
Fund
shares for the same class of shares of another
Lord Abbett
Fund, provided
that the exchange satisfies the investment minimum of the Fund selected;
▪
Redeem their Fund shares at the NAV of such shares pursuant to the procedures set forth under
“Purchases and Redemptions” in the prospectus
; or
▪
Do nothing and their
Fund
shares will be redeemed on or about
the Liquidation Date
. However,
shareholders in individual retirement accounts who do not take other action will automatically have
their shares exchanged for shares of
Lord Abbett
U
.
S
.
Government
& Government Spon
sored
Enterprises
Money Market Fund on or about
the Liquidation Date
.
In connection with the liquidation of the Fund, the Fund no longer will accept purchase orders or exchange
requests
as
of
February 7
, 2025
.
Capitalized terms used in this Supplement
shall, unless otherwise defined herein, have the same meaning as given in the Prospectus and/or SAIs.
Please retain this document for your future reference.
Lord Abbett Municipal Income Fund
PROSPECTUS
FEBRUARY 1, 2025
SHORT DURATION
CLASS
TICKER
CLASS
TICKER
TAX FREE FUND
A....................
LSDAX
F3..................
LSDOX
C ...................
LSDCX
I .....................
LISDX
F....................
LSDFX
INTERMEDIATE
A....................
LISAX
F3..................
LOISX
TAX FREE FUND
C ...................
LISCX
I .....................
LAIIX
F....................
LISFX
P....................
N/A
NATIONAL
A....................
LANSX
F3..................
LONSX
TAX FREE FUND
C ...................
LTNSX
I .....................
LTNIX
F....................
LANFX
P....................
N/A
HIGH INCOME
A....................
HYMAX
F3..................
HYMOX
MUNICIPAL BOND FUND
C ...................
HYMCX
I .....................
HYMIX
F....................
HYMFX
P....................
N/A
SHORT DURATION
A....................
SDHAX
F3..................
HYMQX
HIGH INCOME MUNICIPAL
C ...................
SDHCX
I .....................
SDHIX
BOND FUND
F....................
SDHFX
SUSTAINABLE MUNICIPAL
A....................
LASMX
F3..................
LSMOX
BOND FUND
C ...................
LCSBX
I .....................
LISMX
F....................
LSMFX
CALIFORNIA
A....................
LCFIX
F3..................
LCFOX
TAX FREE FUND
C ...................
CALAX
I .....................
CAILX
F....................
LCFFX
P....................
N/A
NEW JERSEY
A....................
LANJX
I .....................
LINJX
TAX FREE FUND
F....................
LNJFX
P....................
N/A
F3..................
LONJX
NEW YORK
A....................
LANYX
F3..................
LONYX
TAX FREE FUND
C ...................
NYLAX
I .....................
NYLIX
F....................
LNYFX
P....................
N/A
The U.S. Securities and Exchange Commission has not approved or disapproved of these securities or determined
whether this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.
INVESTMENT PRODUCTS: NOT FDIC INSURED–NO BANK GUARANTEE–MAY LOSE VALUE
TABLE OF CONTENTS
FUND SUMMARY
Short Duration Tax Free Fund
2
Intermediate Tax Free Fund
13
National Tax Free Fund
24
High Income Municipal Bond Fund
35
Short Duration High Income Municipal Bond Fund
47
Sustainable Municipal Bond Fund
59
California Tax Free Fund
72
New Jersey Tax Free Fund
83
New York Tax Free Fund
94
MORE INFORMATION ABOUT THE FUNDS
Investment Objectives
106
Principal Investment Strategies
106
Principal Risks
118
Additional Information About Investment and Operational Risks
129
Disclosure of Portfolio Holdings
134
Management and Organization of the Funds
135
INFORMATION FOR MANAGING YOUR FUND ACCOUNT
Choosing a Share Class
139
Sales Charges
146
Sales Charge Reductions and Waivers
147
Financial Intermediary Compensation
151
Purchases
156
Exchanges
158
Redemptions
159
Account Services and Policies
162
Distributions and Taxes
170
FINANCIAL INFORMATION
Short Duration Tax Free Fund
175
Intermediate Tax Free Fund
177
National Tax Free Fund
179
High Income Municipal Bond Fund
181
Short Duration High Income Municipal Bond Fund
183
Sustainable Municipal Bond Fund
185
California Tax Free Fund
187
New Jersey Tax Free Fund
189
New York Tax Free Fund
191
APPENDIX A
Intermediary-Specific Sales Charge
Reductions and Waivers
A-1
PROSPECTUS – Short Duration Tax Free Fund
2
FUND SUMMARY
Short Duration Tax Free Fund
INVESTMENT OBJECTIVE
The investment objective of the Fund is to seek the maximum amount of interest
income exempt from federal income tax as is consistent with reasonable risk.
FEES AND EXPENSES
This table describes the fees and expenses that you may pay if you buy, hold, and
sell shares of the Fund.
You may pay other fees, such as brokerage commissions
and other fees to financial intermediaries, which are not reflected in the tables
and examples below.
You may qualify for sales charge discounts if you and certain
members of your family invest, or agree to invest in the future, at least $100,000 in
the Lord Abbett Family of Funds. More information about these and other discounts
is available from your financial intermediary and in “Sales Charge Reductions and
Waivers” on page 147 of the prospectus, Appendix A to the prospectus, titled
“Intermediary-Specific Sales Charge Reductions and Waivers,” and “Purchases,
Redemptions, Pricing, and Payments to Dealers” on page 9-1 of Part II of the
statement of additional information (“SAI”).
Shareholder Fees
(1)
(Fees paid directly from your investment)
Class
A
C
F, F3, and I
Maximum Sales Charge (Load) Imposed on Purchases
(as a percentage of offering price)
2.25%
None
None
Maximum Deferred Sales Charge (Load)
(as a percentage of offering price or redemption
proceeds, whichever is lower)
None
(2)
1.00%
(3)
None
PROSPECTUS – Short Duration Tax Free Fund
3
Annual Fund Operating Expenses
(Expenses that you pay each year as a percentage of the value of your investment)
Class
A
C
F
F3
I
Management Fees
0.34%
0.34%
0.34%
0.34%
0.34%
Distribution and Service (12b-1) Fees
0.20%
0.81%
(4)
0.10%
None
None
Other Expenses
0.12%
0.12%
0.12%
0.08%
0.12%
Total Annual Fund Operating Expenses
0.66%
1.27%
0.56%
0.42%
0.46%
Fee Waiver and/or Expense Reimbursement
(5)
(0.01)%
(0.01)%
(0.01)%
(0.01)%
(0.01)%
Total Annual Fund Operating Expenses After Fee Waiver and/or
Expense Reimbursement
(5)
0.65%
1.26%
0.55%
0.41%
0.45%
(1)
A shareholder transacting in share classes without a front-end sales charge may be required to pay a commission to its
financial intermediary. Please contact your financial intermediary for more information about whether such a commission
may apply to your transaction.
(2)
A contingent deferred sales charge (“CDSC”) of 1.00% may be assessed on certain Class A shares purchased or
acquired without a sales charge if they are redeemed before the first day of the month in which the 18-month anniversary
of the purchase falls.
(3)
A CDSC of 1.00% may be assessed on Class C shares if they are redeemed before the first anniversary of their
purchase.
(4)
The 12b-1 fee the Fund will pay on Class C shares will be a blended rate calculated based on (i) 1.00% of the Fund’s
average daily net assets attributable to shares held for less than one year and (ii) 0.80% of the Fund’s average daily net
assets attributable to shares held for one year or more. All Class C shareholders of the Fund will bear 12b-1 fees at the
same rate.
(5)
For the period from February 1, 2025 through January 31, 2026, Lord, Abbett & Co. LLC (“Lord Abbett”) has contractually
agreed to waive its fees and reimburse expenses to the extent necessary to limit total net annual operating expenses,
excluding any applicable 12b-1 fees, acquired fund fees and expenses, interest-related expenses, taxes, expenses
related to litigation and potential litigation, and extraordinary expenses, to an annual rate of 0.41% for Class F3 and to an
annual rate of 0.45% for each other class. This agreement may be terminated only by the Fund’s Board of Directors.
Example
This Example is intended to help you compare the cost of investing in the Fund with
the cost of investing in other mutual funds. The Example assumes that you invest
$10,000 in the Fund for the time periods indicated and then redeem all of your shares
at the end of those periods. The Example also assumes that your investment has a
5% return each year and that the Fund’s operating expenses remain the same, giving
effect to the fee waiver and expense reimbursement arrangement described above.
Class C shares automatically convert to Class A shares after eight years. The
expense example for Class C shares for the ten-year period reflects the conversion to
Class A shares. Although your actual costs may be higher or lower, based on these
assumptions your costs would be:
PROSPECTUS – Short Duration Tax Free Fund
4
Class
If Shares Are Redeemed
If Shares Are Not Redeemed
1 Year
3 Years
5 Years
10 Years
1 Year
3 Years
5 Years
10 Years
Class A Shares
$
290
$
430
$
583
$
1,028
$
290
$
430
$
583
$
1,028
Class C Shares
$
228
$
402
$
696
$
1,364
$
128
$
402
$
696
$
1,364
Class F Shares
$
56
$
178
$
312
$
700
$
56
$
178
$
312
$
700
Class F3 Shares
$
42
$
134
$
234
$
529
$
42
$
134
$
234
$
529
Class I Shares
$
46
$
147
$
257
$
578
$
46
$
147
$
257
$
578
Portfolio Turnover.
The Fund pays transaction costs, such as commissions, when it
buys and sells securities (or “turns over” its portfolio). A higher portfolio turnover
rate may indicate higher transaction costs and may result in higher taxes when Fund
shares are held in a taxable account. These costs, which are not reflected in the
annual fund operating expenses or in the example, affect the Fund’s performance.
During the most recent fiscal year, the Fund’s portfolio turnover rate was 66% of the
average value of its portfolio.
PRINCIPAL INVESTMENT STRATEGIES
Under normal conditions, the Fund invests at least 80% of its net assets, plus the
amount of any borrowings for investment purposes, in municipal bonds that pay
interest exempt from federal income tax. The Fund uses the volatility of the
Bloomberg Municipal Bond Short 1-5 Year Index as an approximation of reasonable
risk.
Under normal conditions, the Fund invests in investment grade municipal bonds,
which are bonds that are rated BBB/Baa or higher (at the time of purchase), or an
equivalent short-term rating, as applicable, by an independent rating agency or are
unrated but deemed by Lord Abbett to be of comparable quality. The Fund may
invest up to 20% of its net assets in lower rated municipal bonds (commonly referred
to as “below investment grade,” “high yield,” or “junk” bonds), which are bonds that
are rated BB+/Ba1 or lower (at the time of purchase), or an equivalent short-term
rating, as applicable, by an independent rating agency or are unrated but deemed by
Lord Abbett to be of comparable quality.
The Fund may invest in all types of municipal bonds, including general obligation
bonds, revenue bonds, municipal leases, and variable rate demand notes. The Fund
may invest in both insured and uninsured municipal bonds. The Fund also may
invest in zero coupon, deferred interest, pay-in-kind, and capital appreciation bonds.
The Fund may invest up to 20% of its net assets in municipal bonds that pay interest
that is subject to the federal alternative minimum tax (“AMT”), including private
activity bonds (commonly referred to as “AMT paper”). Although the Fund is
permitted to invest up to 20% of its net assets in fixed income securities that pay
interest that is subject to regular federal income tax, the Fund presently has no
intention of investing in this manner. There is a risk that a bond issued as tax-exempt
may be reclassified by the Internal Revenue Service (“IRS”) as taxable. The Fund
PROSPECTUS – Short Duration Tax Free Fund
5
will not invest more than 25% of its total assets in any industry; however, this
limitation does not apply to tax-exempt securities and securities issued by the U.S.
Government or its agencies or instrumentalities. Certain types of municipal
securities (including general obligation, general appropriation, municipal leases,
special assessment, and special tax bonds) are not considered a part of any
“industry” for purposes of this industry concentration policy. Therefore, the Fund
may invest more than 25% of its total assets in these types of municipal securities.
The Fund may invest without limitation in securities of issuers located in a single
state, territory, municipality, or region.
The Fund may invest up to 20% of its net assets in inverse floaters (also known as
“residual interest bonds”), which are a type of derivative investment that provides
leveraged exposure to underlying municipal bonds whose interest payments vary
inversely with changes in short-term tax-exempt interest rates. The Fund also may
invest in other types of derivatives, such as futures, for non-hedging, hedging, or
duration management purposes.
The Fund may invest in individual securities of any maturity or duration. Normally,
the Fund seeks to maintain a dollar-weighted average maturity of between one and
five years. Although the Fund may invest significantly in money market securities
and their equivalents for investment purposes as well as for cash management
purposes, it is not a money market fund and is not subject to the regulatory
requirements applicable to money market funds.
The Fund’s portfolio management team focuses on credit risk analysis, tax-exempt
income yield, total return potential, interest rate risk, and call protection in managing
its portfolio. The investment team may also consider the risks and return potential
presented by environmental, social, and governance (“ESG”) factors in investment
decisions. The Fund may sell a security when the Fund believes the security is less
likely to benefit from the current market and economic environment or shows signs
of deteriorating fundamentals, among other reasons.
The Fund may deviate from the investment strategy described above for temporary
defensive purposes. The Fund may miss certain investment opportunities if
defensive strategies are used and thus may not achieve its investment objective.
PRINCIPAL RISKS
As with any investment in a mutual fund, investing in the Fund involves risk,
including the risk that you may receive little or no return on your investment. When
you redeem your shares, they may be worth more or less than what you paid for
them, which means that you may lose a portion or all of the money you invested in
the Fund. The principal risks of investing in the Fund, which could adversely affect
its performance, include:
•
Portfolio Management Risk:
If the strategies used and investments selected by
the Fund’s portfolio management team fail to produce the intended result, the
PROSPECTUS – Short Duration Tax Free Fund
6
Fund may suffer losses or underperform other funds with the same investment
objective or strategies, even in a favorable market.
•
Market Risk:
The market values of securities will fluctuate, sometimes sharply
and unpredictably, based on overall economic conditions, governmental actions
or intervention, market disruptions caused by trade disputes or other factors,
political developments, and other factors. Prices of equity securities tend to rise
and fall more dramatically than those of debt securities.
•
Fixed Income Securities Risk:
The Fund is subject to the general risks and
considerations associated with investing in debt securities, including the risk
that issuers will fail to make timely payments of principal or interest or default
altogether. Lower-rated securities in which the Fund may invest may be more
volatile and may decline more in price in response to negative issuer
developments or general economic news due to their increased credit risk
relative to other fixed-income investments. In addition, as interest rates rise, the
Fund’s investments typically will lose value.
•
Municipal Securities Risk:
Municipal securities are subject to the same risks
affecting fixed income securities in general. In addition, the prices of municipal
securities may be adversely affected by legislative or political changes, tax
rulings, judicial action, changes in market and economic conditions, and the
fiscal condition of the municipal issuer, including an insolvent municipality
filing for bankruptcy. The Fund may be more sensitive to these events and
conditions if it invests a substantial portion of its assets in the municipal
securities of similar projects (such as those relating to education, health care,
housing, transportation, and utilities), in particular types of municipal securities
(such as general obligation bonds, private activity bonds, and special tax bonds),
or in the securities of issuers located within a single state, municipality, territory
(such as Puerto Rico), or geographic area. The market for municipal securities
generally is less liquid than other securities markets, which may make it more
difficult for the Fund to sell its municipal securities. Nongovernmental users of
facilities financed by tax-exempt revenue bonds (
e.g.
, companies in the electric
utility and health care industries) may have difficulty making payments on their
obligations in the event of an economic downturn. This would negatively affect
the valuation of municipal securities issued by such facilities.
•
Below Investment Grade Municipal Bond Risk:
Below investment grade
municipal bonds typically pay a higher yield than investment grade municipal
bonds, but have greater price fluctuations and a higher risk of default than
investment grade municipal bonds. The market for below investment grade
municipal bonds may be less liquid due to such factors as specific municipal
developments, interest rate sensitivity, negative perceptions of the junk bond
markets generally, and less secondary market liquidity. This may make such
bonds more difficult to sell at an acceptable price, especially during periods of
financial distress, increased market volatility, or significant market decline.
PROSPECTUS – Short Duration Tax Free Fund
7
•
Call Risk:
A substantial portion of bonds are “callable,” meaning they give the
issuer the right to call or redeem the bonds before maturity. Issuers may call
outstanding bonds when there is a decline in interest rates, when credit spreads
change, or when the issuer’s credit quality improves. As interest rates decline,
these bond issuers may pay off their loans early by buying back the bonds, thus
depriving the Fund of above market interest rates.
•
Credit Risk:
Municipal bonds are subject to the risk that the issuer or guarantor
of a security may not make interest and principal payments as they become due
or may default altogether. In addition, if the market perceives a deterioration in
the creditworthiness of an issuer, the value and liquidity of bonds issued by that
issuer may decline. Credit risk varies based upon the economic and fiscal
conditions of each issuer and the municipalities, agencies, instrumentalities, and
other issuers within the state, territory, or possession. To the extent that the
Fund holds below investment grade securities, these risks may be heightened.
Insured municipal bonds have the credit risk of the insurer in addition to the
credit risk of the underlying investment being insured. A decline in the credit
quality of private activity bonds usually is directly related to a decline in the
credit standing of the private user of the facility.
•
Derivatives Risk:
The risks associated with derivatives may be different from
and greater than the risks associated with directly investing in securities and
other investments. Derivatives may increase the Fund’s volatility and reduce its
returns. Derivatives may not perform as expected and the Fund may not realize
the intended benefits. Whether the Fund’s use of derivatives is successful may
depend on, among other things, the portfolio managers’ ability to correctly
forecast market movements, company and industry valuation levels and trends,
changes in foreign exchange and interest rates, and other factors. If the portfolio
managers incorrectly forecast these and other factors, the Fund’s performance
could suffer. In addition, given their complexity, derivatives are subject to the
risk that improper or misunderstood documentation may expose the Fund to
losses.
•
Inverse Floater Risk:
The Fund’s use of inverse floaters may reduce the
Fund’s returns and/or increase the Fund’s volatility. Distributions on inverse
floaters are inversely related to short-term municipal bond interest rates.
Therefore, distributions paid to the Fund on its inverse floaters will fall when
short-term municipal interest rates rise and will rise when short-term municipal
interest rates fall. Holders of inverse floaters bear the risk of the fluctuation in
value of the issuing trust’s underlying municipal bonds because holders of the
floaters have the right to tender their notes back to the trust for payment at par
plus accrued interest. This creates effective leverage because the Fund’s net cash
investment is significantly less than the value of the underlying bonds. The
leverage ratio increases as the value of the inverse floaters becomes a greater
proportion of the value of the municipal bonds deposited into the trust.
PROSPECTUS – Short Duration Tax Free Fund
8
•
Extension Risk:
Rising interest rates may cause an issuer to pay off or retire a
debt security later than expected, extending the duration of a bond, making it
more sensitive to changes in interest rates reducing the bond’s value.
•
Governmental Risk:
Government actions, including U.S. federal government
actions and actions by local, state, and regional governments, could have an
adverse effect on municipal bond prices. In addition, the Fund’s performance
may be affected by local, state, and regional factors depending on the states or
territories in which the Fund’s investments are issued.
•
Interest Rate Risk:
As interest rates rise, prices of bonds (including tax-exempt
bonds) generally fall, typically causing the Fund’s investments to lose value.
Additionally, rising interest rates or lack of market participants may lead to
decreased liquidity in fixed income markets. Interest rate changes generally
have a more pronounced effect on the market value of fixed-rate instruments,
such as corporate bonds, than they have on floating rate instruments, and
typically have a greater effect on the price of fixed income securities with longer
durations. A wide variety of market factors can cause interest rates to rise,
including central bank monetary policy, rising inflation, and changes in general
economic conditions.
•
Liquidity/Redemption Risk:
The Fund may lose money when selling securities
at inopportune times to fulfill shareholder redemption requests. The risk of loss
may increase depending on the size and frequency of redemption requests,
whether the redemption requests occur in times of overall market turmoil or
declining prices, and whether the securities the Fund intends to sell have
decreased in value or are illiquid. The Fund may be less able to sell illiquid
securities at its desired time or price. It may be more difficult for the Fund to
value its investments in illiquid securities than more liquid securities.
•
Short Duration Risk:
Although any rise in interest rates is likely to cause the
prices of debt obligations to fall, the comparatively short duration of the Fund’s
portfolio holdings is intended to mitigate some of this risk. The Fund generally
will earn less income and, during periods of declining interest rates, will provide
lower total returns to investors than funds with longer durations.
•
State and Territory Risk:
From time to time, the Fund may be more exposed
to risks affecting a particular state, territory (such as Puerto Rico), municipality,
or region. As a result, adverse economic, political, and regulatory conditions
affecting a single state, territory, municipality, or region (and their political
subdivisions, agencies, instrumentalities, and public authorities) can
disproportionately affect the Fund’s performance.
•
Taxability Risk:
Although the Fund attempts to purchase only bona fide tax-
exempt securities (except for its ability to invest up to 20% of its net assets in
municipal bonds that pay interest subject to AMT and fixed income securities
that pay interest that is subject to regular federal and state and local income
taxes, as applicable), there is a risk that a bond issued as tax-exempt may be